Govt will be able to contain CAD at 3.8 pc of GDP: Montek

SummaryIndian economy grew at its slowest pace in four years at 4.4 per cent in the first quarter.

Planning Commission Deputy Chairman Montek Singh Ahluwalia today said the government will be able to contain this year's current account deficit at the target of 3.8 per cent of the Gross Domestic Product.

"Well that (CAD) is at USD 70 billion, we will be able to contain," Ahluwalia told reporters on the sidelines of India-Japan Energy Forum 2013 here.

On asked about the trade data that came out today, he said the numbers were in line with expectation.

"That's in line with what we had expected. We had said that don't be surprised if the first quarter (April-June) data doesn't look good...because all the improvement is going to be after June.

"The exports number for August are good, gold numbers (imports) are good. That is more or less on the track," Ahluwalia said.

India's exports in August grew at the fastest pace in two years, leading to a four-month-low trade deficit of USD 11 billion. The exports, for the second month in a row, increased by 12.97 per cent to USD 26.14 billion, while imports declined by 0.68 per cent to USD 37 billion.

Gold imports, which has been pushing up current account deficit and putting pressure on rupee, dipped to USD 0.65 billion in August from USD 2.2 billion in the month before.

Earlier addressing the conference, Ahluwalia said the government has taken a number to steps to revive the economy, the effects of which will be seen during the second half.

"We are aware that we have problems. We have taken a number of steps. Hopefully, it will bring back higher growth rate. The impact of those steps is not exactly right now...

"It is our hope that in the second half of the year that will lead to some turnaround in the economic growth," he said.

The Indian economy grew at its slowest pace in four years at 4.4 per cent in the first quarter (Q1, or April-June) of the current fiscal year 2013-14, compared with 4.8 per cent during the preceding quarter (January-March) of the last fiscal.